When figuring out your income taxes, married same-sex couples are now able to file a joint state tax return, along with the federal joint return, which should make things easier. In addition, Social Security for married same-sex couples has changed, granting both partners access to their spouse's work record and benefits—which could be higher than their own individually.

Now a spouse can leave property to the surviving spouse without paying estate taxes when the first spouse dies, and a married survivor in a same-sex couple also now is under the state's intestacy statute. If a married person dies without a will, the state will typically give more property to the surviving spouse than other family members.

From an estate planning perspective, the process remains the same. When reviewing your assets, it's important to check how accounts are titled and make sure the primary and contingent beneficiaries are correct. If the couple has created a revocable trust, assets must be titled in the trust's name where appropriate and used on the beneficiary lines, according to their estate planning attorney's instructions.

When an IRA passes to a beneficiary, spouses get special tax treatment because of a spousal rollover provision. A surviving spouse of a same-sex married couple can now delay taking distributions until age 70½ and delay IRA distributions over their own lifetime.

Finally, gift taxes previously applied to transfers of assets exceeding $14,000 between same-sex couples, but now the law allows gifts of any amount between them under the unlimited marital deduction.

The case Obergefell v. Hodges changed the landscape for same-sex married couples in 2015. If you're a partner in a same-sex marriage, you'll want to speak with your estate planning attorney and take advantage of these new benefits.

01/25/2016

In a career of nearly thirty years, Scott Weiland was best known as the lead singer for the band Stone Temple Pilots from 1989 to 2013. Weiland was 48 years old at the time of his death.

The Hennepin County (MN) Medical Examiner's Office said a mix of cocaine, ethanol (alcohol), and MDA led to Weiland's death, in addition to his history of cardiovascular disease, asthma and multi-substance dependence as "significant conditions."

Now Scott Weiland's widow may end up battling his ex-wife over the rocker's estate.

Weiland was married to Jamie Wachtel when he died late last year from the accidental drug and alcohol overdose. In order to substantiate her claim that Weiland named her as the executor of his estate, Forsberg filed a will written in April 2007 with his signature as proof. The couple split up a short time after the will was filed.

The legal documents show that Weiland had $2 million in assets as part of his estate. In addition, he created a trust during his lifetime that includes undisclosed assets.

Jamie Wachtel, the rocker's widow, can still contest Forsberg's filing, although she hasn't publicly commented on Forsberg's legal claim to date.

11/27/2015

Marrying again makes estate planning more involved. How do you provide for everyone you love? Should you provide for everyone you love? How do you arrange to transfer wealth in a way that won’t hurt the feelings of certain heirs? If you have not planned your estate yet, take inventory. Spend a half-hour and jot down the assets you own, major and minor. Who should own these assets after you die? Your spouse should do this, too – and you should talk about your preferences. It may not turn out to be the easiest conversation, but agreement now may preclude family squabbles and legal challenges down the line. You should also consider two scenarios – what happens if you die first, and what happens if your spouse dies before you do.

The Meridian Star, in “Estate planning after a second marriage” explains that if you and/or your spouse have children from prior marriages, there may be issues for each of you. If you pass away first, there is a real possibility that your current spouse won’t provide for your children from past marriages. So to prepare for that possibility, you can make a child the primary beneficiary of a life insurance policy, create a trust for your children, or place certain real property under joint ownership with a child.

If you have written a will, it may require an update. Be extremely specific about which heir gets what and state bequests convincingly. The more convincing your bequest, the less ambiguity and the fewer issues that will arise. Also, update your beneficiary designations for retirement plans, investment accounts, and insurance policies. However, if you’ve been divorced, you may be precluded from changing beneficiaries in certain cases. Talk to a qualified estate planning lawyer. Take a copy of your divorcee decree with you and ask if revising your beneficiary designations will violate it.

You can also take a look at irrevocable trusts, which can be used to provide for your spouse and your kids. Some people establish a separate property trust to provide for their spouse after their death and designate their real property to their children. Parents can also create irrevocable trusts to direct assets to particular children. These can be great estate planning vehicles because: (i) a trust agreement isn’t a public document; (ii) assets within irrevocable trusts are shielded from creditors and from inheritance claims of spouses of the adult children named as heirs; and (iii) an irrevocable trust represents a “finalized” estate planning decision—which guarantees that particular assets transfer to a parent’s biological children. In addition, irrevocable trusts are rarely undone.

Pre-nuptial agreements can also play a role in estate planning, as they let you designate personal assets for existing rather than future children. Post-nuptial agreements (similar to pre-nups, but drafted after a marriage) can also do this, but some states don’t recognize these types of agreements, and sometimes this is up to a judge.

Be sure to consult with an experienced estate planning attorney. Estates with this level of complexity require professional legal assistance from those with a thorough understanding of estate planning and tax issues.

07/15/2015

Last week’s historic Supreme Court decision, Obergefell v. Hodges, affirmed a constitutional right to same-sex marriage in all 50 states, opening up tax, estate planning and employee benefits opportunities for couples in the 13 states that have not permitted same-sex marriage. For one, same-sex married couples may be able to claim state income tax refunds. They no longer have to worry about state estate taxes at the death of the first spouse. And they may save on health insurance at work.

Income Taxes. Married same-sex couples will now be able to file joint state income tax returns. This usually means lower taxes than for two people filing individual returns. The article notes that the changes apply retroactively to open year tax returns. As a result, those couples who were married out-of-state should file for refunds for past years.

Gifts. One notable benefit of married status is that an individual can make unlimited gifts to their spouse without any federal or state gift tax liability. There are no federal gift tax bills now for same-sex couples buying a house. Now if they purchase a home together, even if each contributes a different amount towards the purchase price, they own the home jointly without gift tax issues.

Estate Planning. The Supreme Court’s decision means that same-sex couples can make use of the spousal exclusion in their estate planning. This lets spouses leave one another property without paying estate taxes when the first spouse passes away. A ruling last year gave the federal right to same-sex couples, and last week’s case extended it to the state level. Intestacy laws also now apply to married same-sex couples: they will be able to inherit property in the event that a spouse dies without a will.

Divorce. There are now no issues of support rights with same-sex marriages recognized. Also, where same-sex couples can get divorced isn’t an issue, as every state will grant a same-sex divorce.

IRA rollovers. The article advises to check IRA beneficiary designation forms, because when a spouse inherits an IRA, there’s a special exception that permits a surviving spouse to postpone taking distributions until age 70½. This will stretch out the tax deferred payments over the surviving spouse’s lifetime and reduce federal and state income taxes.

07/13/2015

Below are a few important considerations for estate planning for second (or subsequent) marriages.

If you find yourself looking at marriage for the second or third time, you may want to browse over to The Des Moines Register for an article entitled “Estate planning for a second marriage” that discusses several great tips to keep in mind. Here are a few:

Discuss Money. This is a major cause of stress in any marriage; however, it can be really challenging in a second one. You and your future spouse should talk about and come to an agreement on all of the important financial issues. Make plans that both of you are OK with. If you’re considering a prenuptial or postnuptial agreement, it’s all the more important to tell all (finances-wise).

Consider a prenuptial or postnuptial agreement.This contract is critical if you will bring assets into the marriage, the article explains. A surviving spouse has the legal right to take an “elective share” of the deceased spouse’s estate, regardless of what is in the will, usually one-third or one-half of the elective estate. If this happens, it may result in the unintentional disinheritance of your children or other heirs. The only way to trump the elective share laws is to sign a prenup or postnup where both parties waive their rights to the elective share. This reduces the chance that state law will interfere with your intended estate plans.

Revise your will and other estate planning documents. Remarriage doesn’t revoke a will (although state law can supersede it), so it’s critical that you draft a new will that takes into account your new circumstances.

Providing for children from a previous marriage. It can be a big concern in many second marriages to provide for the new spouse without cutting out children from an earlier marriage. An estate planning attorney can help you place your assets into a qualified terminable interest property (QTIP) trust. With this, all trust income is devoted to supporting the surviving spouse while the principal is preserved for the children. Plus, assets passing to a valid QTIP trust qualify for the marital deduction, which helps reduce possible estate taxes at your passing.

07/07/2015

Coming together at 50-plus is different from getting married in your 20s, particularly when it comes to money. "You've had a lifetime of solidifying your money beliefs" and behaviors, says Janet Stanzak, president of the Financial Planning Association. These are some ways to smooth the transition if you're tying the knot this summer.

It’s true, marriage at 50 looks a lot different than marriage at 25. And no, we aren’t talking about the latest wedding fashions or honeymoon destinations. Financially, there is much to consider when getting married past 50.

AARP Magazine published an article titled “4 Smart Money Moves If You Marry After 50”last summer that did a great job of discussing some reminders before saying “I do” after you turn age 50. These reminders will work for you if you are walking down the aisle this June, July, or August.

Talk about prior obligations. With age comes various obligations like support payments and debts. Share your credit reports and scores, and review previous divorce agreements for details about cash flow, assets and debts.

Don't forget your adult children. Although you may have considered what you'd like to do for them financially, and they've probably have some ideas about what they may one day inherit, a later-in-life marriage changes this. It also complicates your estate planning, so speak with an experienced estate planning lawyer about the changes. The article advises that you discuss your decisions with your new spouse and adult kids to hopefully decrease or eliminate the amount of controversy down the line. You can also formalize these plans in a prenuptial agreement.

In addition to a prenup, revisit your estate plan with a qualified estate planning attorney, in addition to your beneficiary designations. Wills finish second to legal titles to real estate or beneficiary designations on financial accounts, as well as retirement plans and insurance policies. Make any changes in writing, and be careful with Social Security, the article cautions.

On last thing: if you're close to 62 and want to apply for a former spouse's Social Security benefit, you shouldn’t remarry, as you must be single at the time you apply.

05/13/2015

When life gets busy it’s easy to become more passive about managing your bank accounts and credit cards by letting receipts, bills and statements pile up. Even if you regularly keep up with your finances, it can be beneficial to take a fresh look at them. Simplify your financial life with these.

A recent article in The Tahoe Daily Tribune’s, titled “Simplify your financial life,”provides some very helpful advice on de-cluttering and organizing your important information:

Go Green. It’s very easy to find your financial documents online. Going paperless will help reduce the clutter, plus it’s also environmentally friendly. Start with credit cards and bank statements—get them electronically. Most companies send out an email when your statement or bill is ready each month, so you can download and store your statements electronically and make a hard copy to file if needed.

Merge! Retirement accounts are one of the areas that most folks can consolidate. The article notes that if you’ve worked for different employers in your career, you’ve probably have several different retirement accounts. Think about consolidating all of your 401(k) and IRA dollars by rolling them into a centralized retirement account.

Ask a professional. As you sort through your financial choices, enlist the right professionals to assist you. Helpful professionals include a qualified estate planning attorney who can provide guidance on how to put you in the best situation.

Set up an appointment with an estate planning attorney to see if they can help get your financial life organized.